The date was May 15, 1997.
A small company founded in Bellevue, Washington was set to go public. With the modest ambition of selling books online, Amazon (AMZN) listed for just $18 a share.
We all know what happened next…
On a split-adjusted basis, Amazon rose from trading at $1.54 per share to around $1,992 per share today. That’s an incredible 1,327 times your money, or a 132,702% return on investment. That turns every $1,000 invested into $1.3 million.
The best part: Every retail investor had an opportunity to “get in” on this type of investment return. Anyone with a brokerage account could’ve enjoyed these kinds of gains.
But sadly, the opportunity to invest in the “next Amazon” has all but disappeared today.
You see, something extraordinary has changed during the last decade. And very few investors know about it…
The pace of technological innovation and new company creation is at a rate we’ve never seen before. But the opportunities to invest in the next Amazon or Google have all but disappeared.
Well, back in the late 1990s or early 2000s, if a private technology company had $20 million to $50 million in revenues and was generating free cash flow (i.e., its cash balance was growing, not shrinking), it was time to go public.
Companies sold shares via initial public offerings (IPOs). This gave them the capital needed to reach the next stage of growth.
Today, more and more tech companies are using angel investors’ and venture capital (VC) dollars (funds from private individuals and investment groups) to bring their products to market.
These companies can fund research, development, and revenue growth without the scrutiny and expense of being publicly traded.
The chart below gives you an idea of this trend…
2018 was an absolute record year for VC activity. VC firms invested $156.5 billion across 8,661 deals. That’s the most VC investment in a given year ever. It even eclipsed that of the dot-com years.
And it’s not just VC funds. A flood of private money has been funneled toward early stage tech companies. Since 2009:
Asset management firms increased their exposure to tech startups by 11 times.
Family offices increased their exposure by 14 times.
Hedge funds increased their exposure by 16 times.
Mutual funds increased their exposure by 38 times.
These investment flows into tech companies has led to tens of billions of dollars of funding in technology annually that never existed before.
That’s great news for tech startups needing capital to grow and develop their businesses. But there’s a downside for the average investor…
The private financing of tech companies has caused the entire tech IPO market to dry up over the last few years. After all, why would a company go public if it can just raise round after round of private funding?
You can see this trend in the chart below:
The flood of private capital has let leading-edge tech firms stay private for much longer than normal. With “easy” access to round upon round of new capital to invest in and grow their businesses, they don’t need to go public.
But it also means Main Street investors can’t profit from these transformational companies. The biggest returns go to connected venture capitalists. Everyday investors are left out in the cold.
But I have good news…
After over two decades of locking regular investors out of the most exciting tech investing opportunities, the trend is finally reversing.
There are hundreds of “digital first” tech companies ready to IPO in the near future.
These companies were born in the ashes of the dot-com bust and remained private for a long time because of the floods of private capital.
Collectively, the 2019 IPO boom is expected to set the record for total capital raised by U.S. IPOs in a single year…
As you can see, the 2019 IPO frenzy is expected to eclipse the dot-com boom of 1999—when 547 IPOs raised $107.9 billion.
Ultimately, 2019 will be a banner year for tech IPOs. And it’ll give investors the chance to invest in the most exciting companies on the planet.
Companies like Uber, Lyft, Pinterest, and Slack have already gone public. For the first time in years, average investors will have the chance to invest in leading-edge technology companies simply by clicking a button in their online brokerage accounts.
And this trend is only picking up. Take a look at the total capital raised from IPOs, broken down by month…
As you can see, May was a great month for IPOs. In fact, U.S. IPOs raised more money during the month of May than they did from January to April, combined.
So what does this all mean for investors?
It means that, for the first time in years, everyday investors will be able to invest in the best tech stocks in the market.
You’ve likely already heard about some of these blockbuster IPOs—like Uber and Lyft.
But make no mistake. This trend is much bigger. There’s a backlog of tech deals right now, waiting to hit the public markets.
In fact, the largest, fastest returns won’t be found in large IPOs like Uber and Lyft. I’ve found something better.
For five years, I’ve been quietly developing a system to pinpoint small tech stocks on the verge of explosive moves higher. And I’m finally ready to reveal my research.
If you want to make money in weeks—not years—from early stage tech, this is the best way I know how.
And before you ask: No, I’m not talking about buying pre-IPO shares.
It’s something else entirely. And I’ll reveal the details during my free online investing summit this Wednesday, July 24 at 8 p.m. ET. I’ll lay it all on the line then.
Editor, Exponential Tech Investor
P.S. As you can see with Amazon, investing in the right early stage tech firms can make you life-changing gains. And I’ve uncovered a way to find the best of these companies with stunning accuracy—allowing Main Street investors to get in on these types of profits. So be sure to sign up for my Wednesday webinar right here.